Insurance companies’ death benefit practices result in monetary settlement

TOPEKA – Kansas Commissioner of Insurance Sandy Praeger announced yesterday the Kansas Insurance Department will receive $510,146 in settlement funds from seven insurance companies following a review of the companies’ death benefit practices.

The department has or will receive the following amounts from these insurance companies: ING, $114,726; New York Life, $110,255; Lincoln National, $78,182; TransAmerica, $67,668; TIAA-CREF, $67,620; Aviva and Global Atlantic, $48,057; and Midland, $23,638. The funds are the Kansas portion of the national settlements for each company.

Previously, life insurance companies used the Social Security Death Master File to search for and stop payments to deceased annuity holders, but they had not used the database to identify deceased life insurance policyholders in order to pay beneficiaries promptly. Under the settlement agreement, they now have to.

The settlement money, under Kansas law, goes to the state’s general fund budget.

The insurance department has received similar settlements from other insurance companies during recent years as part of a general industry reform brought about by state insurance regulators such as the Kansas Insurance Department.

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